Lessons from Literature 2: Sense and Sensibility

Ahhh, Jane Austen. What an amazing writer. One of the best days of my 2015 trip to Europe was when I went to her house in Chawton, which is now the Jane Austen Museum. It’s SO much better than the more famous one in Bath, as this place has so many of Jane’s own things. I blogged about it here.

‘Sense and Sensibility‘is the quintessential “A Man is not a Financial Plan” guidebook. None of the story would have happened if the second Mrs Dashwood had had her wits about her. In her youth, well before the novel begins, she married a widower, Mr Henry Dashwood, who already had a son from his previous marriage. Under the laws of his estate, the vast majority of the land, house and money legally have to go to the first son when Mr Dashwood dies. She will be left with virtually nothing.

Now, the second Mrs Dashwood has no visible means of supporting herself. She has no real education, no career path and no income of her own. But she blithely marries Mr Dashwood anyway because YOLO ain’t love grand,  spawns 3 daughters and then is perturbed to realise once she’s a widow that her husband, although he had years to get his financial affairs in order in order to provide for his daughters, had instead spent his money on a lavish lifestyle, keeping up with the Joneses and keeping a large stable full of expensive, Ferrari-like horses. Serenely expecting her stepson to do the right thing and cough up some of the money he inherited, she’s dismayed to discover that he has no such intention.

Consequently, she can’t financially support her daughters, (all of whom are equally untrained to forge a career path) and it’s only through the generosity of a distant cousin who offers them a cottage in the boondocks to live in that she’s even able to put a roof over her daughters’ heads.

She didn’t even have an emergency fund in place, let alone a share portfolio or a tidy sum tucked away in index funds. Talk about immediate gratification-type thinking coming back to bite you!

Listen to this passage, which describes Mrs Dashwood’s attitude when they move to their new rental:

• “As to the house itself, to be sure,” said she, “it is too small for our family, but we will make ourselves tolerably comfortable for the present, as it is too late in the year for improvements. Perhaps in the spring, if I have plenty of money, and I daresay I shall, we may think about building. These parlours are both too small for such parties of our friends as I hope to see often collected here; and I have some thoughts of throwing the passage into one of them with perhaps a part of the other, and so leave the remainder of that other for an entrance; this, with a new drawing room which could easily be added, and a bedchamber and garret above, will make it into a very snug cottage. I could wish the stairs were handsome. But one must not expect everything, though I suppose it would be no difficult matter to widen them. “

She has clearly been watching too many home improvement shows. I’m surprised that a granite bench top and ensuites for all the bedchambers weren’t on the list as well. However, Austen is onto it. Look at what she says in the very next paragraph:

• In the mean time, till all these alterations could be made from the savings of an income of five hundred a year by a woman who never saved in her life, they were wise enough to be contented with the house as it was…

By the end of the novel, Mrs Dashwood resigns herself to staying in the inadequately-sized cottage and her daughters are well-looked after. Phew! It all worked out well in the end but Mrs Dashwood had to go through a steep learning curve to be able to learn how to live within her means. Of course, once Elinor and Marianne were off her hands she only had Margaret to feed and house. I can tell you from experience that feeding one child is FAR cheaper than feeding 3 of them in their 20’s. They eat like horses. Mrs Dashwood’s grocery bills would have been through the roof before the girls moved out.

All of the trauma and heartache the girls go through in this novel could have been avoided if Mr and Mrs Dashwood had followed these few simple rules:

1. Pay yourself first – take at least 10% of your income and tuck it away into investments.
2. Don’t go into debt.
3. Spend less than you earn.
4. Have some splurge money, but don’t go crazy.
5. Invest all that’s left.
6. Don’t believe handsome young men who flirt with your daughters are always eligible husband material.

Austen isn’t usually thought of as a personal finance writer, but I believe she has many observations that still hold true today. Perhaps with Sense and Sensibility she should be looked on as the first FI writer?